FTC accuses Microsoft of misrepresenting its Activision Blizzard plans after layoffs

One week after Microsoft laid off practically 2,000 staff in its gaming division, the Federal Commerce Fee is accusing Microsoft of contradicting its pledge to permit Activision Blizzard to function independently post-acquisition. The FTC filed a complaint in a federal appeals court docket on Wednesday, arguing that final week’s downsizing, which affected staff of Activision Blizzard, “contradicts Microsoft’s representations on this continuing.” The FTC is asking for a short lived pause of Microsoft’s acquisition of Activision Blizzard because it additional investigates potential antitrust points.

In its arguments to the FTC over the past two years, Microsoft mentioned it could deal with Activision Blizzard as a vertical acquisition and steered that it would not have to institute layoffs, since there could be no redundancies. On January 30, Microsoft introduced it was cutting 1,900 jobs throughout Activision Blizzard, ZeniMax and Xbox after figuring out “areas of overlap” particularly between Microsoft and Activision Blizzard. This discrepancy is the core of the FTC’s grievance.

“Microsoft’s recently-reported plan to get rid of 1,900 jobs in its online game division, together with in its newly-acquired Activision unit, contradicts the foregoing representations it made to this Courtroom,” the FTC’s grievance mentioned. “Particularly, Microsoft reportedly has acknowledged that the layoffs had been a part of an ‘execution plan’ that would cut back ‘areas of overlap’ between Microsoft and Activision, which is inconsistent with Microsoft’s suggestion to this Courtroom that the 2 firms will function independently post-merger.”

Although the UK’s Competitors and Markets Authority approved Microsoft’s $69 billion acquisition of Activision Blizzard in October, the FTC hasn’t seen satisfaction concerning its personal antitrust issues. The FTC remains to be difficult the acquisition, which implies there is a chance that Microsoft shall be pressured to divest all or a part of Activision Blizzard.

In Wednesday’s grievance, the FTC argued that the current layoffs additionally undermine its personal skill to order reduction for workers who had been negatively affected within the acquisition.

Microsoft’s layoffs be a part of an avalanche of mass firings within the online game business, particularly prior to now few months. An estimated 10,500 folks in video video games misplaced their jobs in 2023 — and already in 2024, 6,000 staff have been laid off.